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Liquefied Natural Gas in Qatar Essay

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Updated: May 10th, 2021

Introduction

Qatar is considered to be one of the key exporters of liquefied natural gas (LNG) in the world. In 2016, it produced 181.2 billion cubic meters of gas, of which domestic consumption was only 41.7 billion cubic meters, while export reached 104.4 billion cubic meters (“Natural Gas Production”). According to the report of the Qatar National Bank (QNB), the country accounts for 30.1 percent of the global share of LNG, and most of the demand came from African and Asian countries (Japan). This paper will provide a literature review based on the recent information in the given field.

Natural Gas Resources (Fields)

Due to a variety of factors, Qatar retains its status as the world’s largest LNG producer. One of them is huge reserves, the volume of which reaches 900 trillion cubic meters, which is approximately 20 percent of the world’s resources. The second is the ease of gas production as well as the broad industrial base and experience accumulated by the Qatari gas companies over the past twenty years.

There are several large fields in Qatar that provide NLG, including Al Shaheen (300,000 barrels daily), Dukhan (225,000 barrels daily), and Idd alShargi (100,000 barrels daily) (Japan). The primary operators of the mentioned fields are Maersk, Qatar Petroleum, and Occidental, respectively. All of the mentioned largest fields present great potential to grow, and, therefore, operators invest in their development. The literature review also reveals some minor companies working in gas production, the capacity of which ranges between 7,000 and 45,000 barrels per day (Japan).

Production

Despite the embargo of Qatar set by the Quartet countries (Saudi Arabia, the United Arab Emirates, Egypt, and Bahrain), it is safe to suggest that the Qatari economy stood up in the face of such acts of its Arab neighbors (Gloystein). In these conditions, LNG became the core tool that gives Qatar an incentive to develop. Gloystein claims that the policy pursued by Qatar allowed neutralizing the negative consequences for the economy, especially in the gas sector, where the country has achieved great success in recent years. Many manufacturers have entered the market, between which there is competition for access to resources and distribution of quotas for gas supplies (Naji). At the same time, LNG is recognized as the cheapest and safest gas that provides Qatar with a competitive advantage.

Qatar is considered one of the smartest gas producers in the world, which maintains the balance in the market without forgetting its own interests. It is obvious that the increased productivity will strengthen Qatar’s position in the long term. In his latest statements, Dr. Mohammed Bin Saleh Al-Sada, the Minister of Energy and Industry, declared that the measures taken against Qatar proved that the country has a stable and diversified economy (“Ministry of Energy & Industry”).

According to the minister, LNG supplies to Japan, India, South Korea, and China account for approximately 75 percent of the country’s exports, and sanctions did not affect these figures. It should also be stressed that Qatar fulfills obligations under all agreements with partners and intends to preserve the current state of affairs in the gas sector, despite the unlawful and unfair actions of its neighbors (Naji). Thus, the production of NLG in Qatar is growing, and the processes involved in it seem to be apparent and effective.

Exports

It is noted that the increasing volumes of gas production in Qatar, along with the need of a number of countries for its supplies, indicate the confidence of the world in Qatar. Although the propaganda is carried out by the opposing countries, Qatar’s solution to raising the level of production of LNG was made in a timely manner and corresponded to the current situation. Recently, the Qatari RasGas Company made the first delivery of LNG to the floating terminal Toscana near Italy for storage and subsequent regasification (“RasGas Delivers First LNG”). It seems essential to pinpoint the fact that the mentioned event marked a new shift in the expansion of Qatar to European gas markets, where Italy may stand along with the United Kingdom and Spain as an importer of Qatari natural gas.

Following the results of 2017, Qatar Petroleum increased foreign LNG supplies to 77 million tons. Now, Qatar is to find buyers for new volumes of liquefied gas as the country plans to increase its export by 30 percent in the next five to seven years – by 100 million tons per year (“WrapUp 1 – Qatar Raises”). It is worth mentioning that Indian Petronet LNG and France’s Total SA have already expressed interest in additional purchases of LNG (Mukherjee and Verma). A number of companies from China, Russia, the United States, and Europe also intend to take part in the creation of the necessary liquefaction capacities.

Due to the isolation, LNG supply routes from Qatar have to be changed, and in the future, India will have to sell more gas in the spot market, which is usually less profitable. Simultaneously, Egypt and the UAE, in particular, the Dubai emirate, which supported Saudi Arabia in the actions against Qatar, will have to look for new gas suppliers, and those cargoes that they refused could be sent to Western Europe. For instance, the UK, the largest gas storage facility of which will be closed, seems to welcome new sources of Qatari LNG.

Following the new development program, it is planned to increase the global share of Qatar to six million barrels in oil equivalent daily. In an effort to increase gas production by 30 percent over the next five to seven years, Qatar warns competitors in the energy market and the Persian Gulf countries involved in the isolation (“WrapUp 1 – Qatar Raises”). This measure prevented the attempts of embargo countries to influence the world companies that have rushed to the Qatari market after the statement of production. The specified decision also gave confidence to world markets since Qatar remains faithful to its investment projects, and the intended programs are implemented in a planned mode. It should also be stated that due to the equipment of the ports, Qatar was able to continue the export of LNG.

Conclusion

To conclude, Qatar was able to prove that it is capable of increasing its export of LNG even in the conditions of the embargo imposed against the country on the initiative of Saudi Arabia. The new program announced by Qatar implies an increase in the total LNG production by 30 percent, namely, to 100 million tons per year. In general, the production of NLG by Qatar is likely to grow significantly in the future caused by its great resources, well-developed infrastructure, and the interest of several countries to act as suppliers.

Works Cited

Gloystein, Henning. “LNG World News. 2017. Web.

“Ministry of Energy & Industry, Doha, Qatar.” Doha International Sustainable Energy 2018, n.d. Web.

Mukherjee, Promit and Nidhi, Verma. “India’s Petronet LNG Aims to Partner with ONGC Videsh in Qatar Project.” Reuters. 2018. Web.

Naji, Abi-Aad. . 1998. Web.

Statista, n.d. Web.

.” Qatar Gas. 2016. Web.

.” Reuters. 2017. Web.

Yapin, Yorum. “Vural Cantug Akkas. 2017. Web.

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